The Business Bytes
Mumbai, November 1, 2024 (TBB Bureau): Capri Global Capital Ltd. (CGCL), a prominent non-deposit-taking and systemically important NBFC, showcased a robust financial performance for the quarter ended September 30, 2024. The company reported continued growth across its portfolio, strengthened profitability, and improvements in cost efficiency, asset quality, and capital adequacy.
CGCL’s consolidated AUM reached ₹19,250 crore, marking a 56% increase year-on-year (YoY) and a 10% rise quarter-on-quarter (QoQ). Retail growth was largely driven by housing loans, up by 33% YoY, and an impressive surge of 225% YoY in gold loans. Co-lending AUM grew to ₹3,519 crore, contributing 18.3% of the consolidated AUM, up from 16.4% in the previous quarter. Disbursements also increased significantly by 55% YoY.
To diversify its portfolio, CGCL introduced Roof Top Solar Finance under its MSME Loans segment, aiming to build a ₹1,000 crore green financing portfolio in the near term. The overall AUM expansion was also reflected in customer acquisition, with 108,000 new customer relationships added QoQ, taking the total to 697,000.
Profit after tax (PAT) for Q2 FY25 stood at ₹970 crore, registering a 49% YoY growth and 28% QoQ increase. Net interest income grew by 22% YoY, fueled by a 38% YoY rise in the loan book. Pre-provisioning operating profit surged 34% YoY to ₹1,457 crore, reflecting solid profitability driven by strategic expansion and operational efficiencies.
CGCL also reported an improved cost-to-income ratio at 64.3%, a 6.2% improvement from Q4 FY24. The company attributed this enhancement to productivity gains from branch and employee expansions and significant investments in technology made over recent years.
The company’s non-interest income rose 29% YoY in Q2 FY25, now contributing 25.2% of total income. This was primarily driven by co-lending fee income. CGCL’s car loan distribution reached ₹2,563 crore, growing 8% YoY and 15% QoQ, further bolstered by new partnerships. The company also formed 18 alliances for insurance distribution under a composite license, projecting a net fee income of ₹40 crore from insurance distribution by FY25E.
CGCL emphasized its commitment to improving asset quality through advanced analytics and customer segmentation. Credit costs normalized to ₹17.4 crore, reflecting a 24% YoY and 62% QoQ decline. The Gross Stage 3 ratio improved from 2.0% in Q1 FY25 to 1.6% in Q2 FY25, and the Net Stage 3 ratio dropped from 1.2% to 1.0%. Provision Coverage Ratio (PCR) on Stage-3 loans stood at a solid 40.1%.
CGCL remains financially resilient with a standalone capital adequacy ratio of 23.7% and a net worth of ₹3,200 crore. The housing finance subsidiary CGHFL reported a CAR of 31.9% and a net worth of ₹820 crore as of Q2 FY25.
Commenting on the company’s performance, Founder & Managing Director Rajesh Sharma stated, “We continue to see strong growth momentum and further diversify our product offerings with the launch of new green financing products like Micro LAP and Roof Top Solar loans. With our investments in technology and a focus on productivity gains, we anticipate further reductions in our cost-to-income ratio. Looking ahead, our strong asset quality, high capital adequacy, and steady growth in fee income position us well to achieve an AUM of ₹30,000 crore by FY27 and a return on equity (RoE) of over 15% in the medium term.”
